Shutting Down My Startup

This post-mortem blog post is re-posted from the Thrive.ly company blog (which has since been shut down).

Dear Thrive.ly users, friends, and advisors:

It is with a sad heart that I announce today that Thrive.ly is shutting down. For almost two years, we have been dedicated to our vision of revolutionizing workplace feedback. Unfortunately, we have been unable to secure the financial resources necessary for us to continue.

We are extremely grateful to have met and spoken to hundreds of you who share our vision, giving us your support and advising us on this journey. Most importantly, you gave us the motivation to get as far as we did. Even though Thrive.ly is shutting our doors, we’d like to think we have made a small dent in the world with your help. You have exchanged countless pieces of feedback with your colleagues, and have championed the cause of improving feedback in your organizations. Hopefully, some of your workplaces have more transparent feedback cultures because of our work together.

What happens next?
The Thrive.ly web app will continue to be available for the next few weeks, and will officially shut down on June 15. Current users should access and save their feedback before that date (please contact us if you need any help).

Why is Thrive.ly shutting down?
In the wake of the dissolution of Thrive.ly, I’ve read my share of entrepreneur postmortems. Most of them analyze the mistakes they’ve made along the way and what they would have done differently. “Hindsight is 20/20″ as the saying goes, but I don’t actually believe that. As an entrepreneur, we work in uncertainty, and we make the best choices we can with the information we have at that time. There is no way for me to know what the outcome would have been if I had taken a slightly different path. Was I one meeting away from a seed investment? One call away from my first sale? Did I not recognize signs that we didn’t have product-market fit? I’ll never know, and I don’t think its worth my time to guess. The problem is, even some of the most successful startups looked like failures for a long time (known as the startup trough of sorrow).

Here is what I know for sure: I put 100% into Thrive.ly and accomplished many of the things I set out to do that I had never done before (I launched a company, designed and built software, and raised money).

That’s not to say I didn’t learn anything on the way. I learned a ton, and one of the most important things I learned is that it takes a long time to build a successful business (that “trough of sorrow” can last 2+ years). In fact, some folks in the “social performance management” space (aka the “lets tear down the awful institution of performance reviews” crowd) have posited that the market isn’t yet ready and it will take some time before someone can be successful. There is likely some truth to that. We were seeking out customers that embodied what we saw as the future: organizations that exemplify flat, democratic, and transparent cultures (inspired by the likes of WL Gore, Menlo Innovations, and many others). What we found here was: there aren’t actually that many organizations like this (although it is clearly a growing trend); and, the democratic organizations we met have such strong, unique cultures that they were hesitant to change processes or embrace a new tool. At the time we were discovering this, we watched a number of interesting competitors shut their doors (ClearGears, Worksimple, Qrew, UpMo, and Workity Work). While I was able to give myself enough financial runway to work full-time on Thrive.ly for a year (more truthfully, Emily was), we suffered the same fate because it ultimately wasn’t enough time to get to the next stage.

Time isn’t just money, it’s also about motivation and drive. For most entrepreneurs, including myself, it’s easy to run out of those too without co-founders (even with co-founders). The next big thing I learned: recruiting a team is a larger challenge than I ever could have imagined. As a first time founder with only a tiny network in the startup world, I did everything I could to improve my chances of meeting great co-founders. I spent many months hitting up every Meetup, FounderDating event, and hack night I could find. I re-learned how to code and read everything I could about entrepreneurship and product development. I spoke about my vision at any venue I could find. And in the process, I had the chance to work on Thrive.ly with many amazing people: extremely talented web developers, visual and user experience designers, and fellow MBA’s. But unfortunately, I wasn’t able to find someone that had the right mix of talent, passion for the idea, and financial flexibility to make the entrepreneurial leap with me. There is also a double-bind that I’ve seen for myself and other first time entrepreneurs: in order to attract a co-founder, you need to prove you have the skill to build a great product; but once you do build something, it becomes harder to inspire someone else to feel ownership of the product vision. I have seen many first time co-founder success stories, but there is definitely some luck to it (or perhaps planned serendipity). Fortunately, I now have a great network of people to tap into when I’m ready for my next startup.

What are the alternatives to Thrive.ly?
Before you go off seeking other tools: I would love to find a way for Thrive.ly to live on. If you have any interest in repurposing our tool in some way, or would like to help us release Thrive.ly as an open source project, please reach out to me directly.

As for alternatives, there are very few apps that I’ve seen that focus on Thrive.ly’s main competency of workplace peer feedback. Apparently, Rypple (now Salesforce’s Work.com) originally launched with a focus on feedback, but it is now part of a much bigger suite of tools including badges and peer recognition. 7Geese, which is similar to Rypple/Work.com, also features tools for direct peer feedback in its suite (as did WorkSimple which recently shut down). There are many other tools in the broader market of companies innovating on the standard performance review process. I think Small-Improvements is a company to watch, and was impressed when they were chosen as the vendor for Atlassian’s performance review innovation. Folks like GoodRevu and MicroEval are simplifying the standard performance review process; Teamly and WorkforceGrowth are social performance management tools built on the platforms Tibbr and Google Apps, respectively; 15five and TinyPulse are helping push employee feedback up to managers; and Kudos and Wooboard are making it easy to recognize employees. I’ve had the chance to talk to a number of my peer founders at these companies, and think they are all doing interesting and important work. I hope that, in the near future, we will see a few emerge that are really able to transform the dominant culture around performance management.

Feel free to contact me with questions about this space, and leave a comment if there is an interesting company I missed or you’ve had good (or bad) experience with one of these tools. I’ll also make a quick plug for Lloyd Nimetz and Joaquin Roca who are both doing interesting consulting work with startups on agile performance management and company culture.

What’s next for me?
I’m trying to figure that out now, but I’d like to apply my product development and online marketing skill set within a later-stage (read: funded) startup in SF. If you know someone who may be looking for their next product manager or “growth hacker”, please have them reach out to me on LinkedIn.

Thank youAgain, my sincerest appreciation goes out to everyone who has leant their support along the way: all of our users, advisors, investors, coaches, friends, and family (especially my wife, who has–among many other things–edited out my countless grammatical errors from this final blog entry). Thank you, and see you next time!

Feels weird to say “Congrats”…maybe “Well played” is more appropriate. You made a lot of friends along the way and took a smart, long-term investor approach to entrepreneurship. Looking forward to supporting you in your next venture.